Golfsmith Marketing and Operations Recommendations

Date:  March 26, 2014

TO:  Vice President of Marketing

CC:  Vice President of Operations

Subject: Golfsmith Marketing and Operations Recommendations

Dear Vice President of Marketing

My name is  , who is in charge of the business intelligence group at Golfsmith marketing and corresponding operations of the company. My proposal is to improve revenue and reduce advertising costs. The analysis tool is IBM Cognos, I analyzed the sales data of our company, and made some figure in order to make it clear. Through the current operations and quality impacts of several changes, I would like to make some recommendations to improve our revenue and lower our cost. [pic 1]

Figure 1e

        The first important item is revenue. From the figure 1e we can conduct that department store has contributed the most revenue per store in all regions, which is $21,613,419 dollars. But sports store has contributed the highest revenue in total sales, which is $816,289,693.73 dollars. This means the revenue of some sports stores is really low, it is decreasing the average revenue of sports stores. Therefore, Golfsmith should expands more department stores and close some sports stores which contributes low revenue than other sports stores. According to the sales in different region, American has the most revenue, which is $740,296,944.09 dollars; but Asia Pacific contributes the highest revenue per store, which is $15,075,196 dollars. Also, this means there are some stores in America that contribute really low revenue, it is decreasing the average level. Therefore, we should close some stores in America that have low revenue than other stores. Furthermore, we should open more stores in Asia Pacific, this will increase our revenue. Sum up all the information, we can enhance our sports stores which have higher revenue than other sports stores to keep achieving a high revenue, and expands more stores in Asia Pacific.

[pic 2]

Figure 2d

The second important item is advertising cost. Advertising cost is a huge amount and influence the profit of our product, more importantly it can be avoided easily if we cut down the advertising cost of those unmarketable products. According to the figure 2d we can know that the products of wood series use the most advertising cost, also it brings the most revenue for the company. On the other hand, the ratio of adverting costing and revenue for Golf Accessories is much lower than other products, which means we paid high advertising cost and got low revenue for Golf accessories. Therefore, we should reduce the advertising cost for Golf accessories and raise the adverting cost for wood series. The situation of putter series is similar to Golf accessories, we should also reduce the advertising cost for putter series, and this will increase our revenue and lower our adverting cost.  There is one thing that noticeable, the products Hailstorm Titanium Irons and Lady Hailstorm Steel Woods Set; they do not occur any advertising cost, but they are still generating revenues, which are $94,940,604.6 dollars and $49,453,709.34 dollars. This means these products are known by some people, we can try to add some advertising budget for these products, and it might be able to boom the revenue. In addition, we can reduce the advertising cost of our best seller product, because it is already known by public. And the adverting channels can be improved, the radio adverting channels spent the most, which is $13,818,876 dollars. When too much resource put into one area, there would be some waste. We should try to the E-mail advertising. Our target group are the people who have a high salary, and most of them check E-mail very frequently, this is a good chance to create our new customers.